Page 35 - Food Outlook

surge in orders from South Asian countries affected by poor weather. In Thailand, the price of benchmark 100% B white rice dropped by 12 percent below its June value to arrive at USD 411 per tonne in October, notwithstanding a general strengthening of the Thai baht. Among the major rice exporters, only the United States saw long-grain prices continue their upward trajectory, sustained primarily by expectations of a steep production decline and an upbeat pace of foreign sales.
On an annual basis, these tendencies brought the January–October average of the FAO All Rice Price
Index to 204 points, up 4 percent from its value in the corresponding period of 2016. Most of this increase was the result of a 32 percent surge in aromatic quotations, although lower quality Indica values also posted a 3 percent increase. Prices in the other rice market segments remained slightly below their corresponding levels in the previous year.
PRODUCTION
Growth prospects undermined by weather setbacks
Since the previous Food Outlook report, a series of unfavourable climate-related events have affected main paddy crops in the Northern Hemisphere, which have now reached the harvesting stage. This has been the case in Asia, where, unlike 2016, the critical Northern Hemisphere summer months were characterized by mixed growing conditions that inhibited planting expansions. As a result, FAO’s latest forecast of world rice production in 2017 points to a broadly stable output level of 500.8 million tonnes (milled basis).
Figure 3. Global paddy production and area
Production in Asia is now forecast to fall 550 000 tonnes below the 2016 bumper harvest to 452.5 million tonnes. Within the region, the Republic of Korea, Japan, Nepal and Viet Nam are all set to see output negatively affected by excess rains or cloudy conditions, whereas reductions
in the Democratic People’s Republic of Korea and
Sri Lanka would be linked to abnormal dryness. A sequence of floods also dampened the outlook for Bangladesh,
likely translating into a third successive season of little or negative production growth. In India, although government incentives kept Kharif crop plantings at above-normal
levels, the uneven distribution of the rains caused main-
crop acreage to decline by 0.9 percent year-on-year. The monsoon also left behind a mixed water supply situation
that could preclude a sizeable increase in secondary crop plantings. As a result, FAO anticipates 2017 output in
India to fall 1 percent below the 2016 all-time high to
109.5 million tonnes. In China (Mainland), even though
this year’s cut in the government purchasing prices reduced Indica plantings, most of the area contraction is likely to be compensated by yield improvements and a shift away from maize cultivation in favour of still profitable Japonica rice. Thus, the country’s 2017 output is seen little changed year-to- year, at 141.8 million tonnes. Among the countries that have benefitted from more favourable weather, particularly positive results are expected in Indonesia, where the sector continues to draw support from the Government, but also in Thailand, where improved price prospects and ample water supplies
are likely to allow another output expansion. Record-breaking crops are also anticipated in Cambodia, Pakistan and the Philippines, with the Islamic Republic of Iran, Iraq, the Lao People’s Democratic Republic, Malaysia, Myanmar and Turkey all set to gather larger crops.
Figure 4. Paddy production in Asia
million tonnes
780 724 668 612 556
million ha
165 158 151 144 137
2015 2016 2017 130
estim. f’cast
500 2009 Production
2011
2013
Area
million tonnes 210
175 140 105
70 35 0
2017 forecast
China
India
Indonesia Bangladesh Viet Nam
Others
FOOD OUTLOOK NOVEMBER 2017
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RICE
2016